Benefits Plans - Flexible Spending Accounts: Eligibility and Enrollment
You are eligible to participate in FSAs as long as you receive a salary and funding for at least four consecutive months from the University of Michigan, and you are a:
- Regular or supplemental faculty or staff member;
- Member of AFSCME, IUOE, POAM, MNA, or Trades
- House Officer;
- Graduate Student Instructor (GSI), Graduate Student Research Assistant (GSRA), Graduate Student Staff Assistant (GSSA); or
- Research Fellow.
Flexible Spending Account contributions cannot be taken from a fellowship grant, a stipend, or from temporary hourly paychecks.
Your participation in the Flexible Spending Accounts is completely voluntary. If you wish to participate, you must enroll each year, even if you wish to continue the same annual contributions from year to year. You must have sufficient earnings to cover the amount you choose to contribute to an FSA.
The enrollment process depends on whether you are a new hire or a continuing faculty or staff member.
- Newly Hired: If you are newly hired or newly eligible, complete the enrollment form and enroll within 30 days of your hire date or the date of your newly eligible appointment.
- Continuing Faculty and Staff Members: Each year, you will be asked to re-enroll in your Flexible Spending Account(s) during the annual Open Enrollment, which is usually held in October.
Before You Enroll, Consider This
- You can only request reimbursements for eligible expenses. Your Flexible Spending Account(s) can only be used to reimburse eligible expenses for care provided from the effective date of your enrollment through March 15 of the following year.
- Effective Date. Your account becomes effective the first of the month following the date the enrollment form is received by the HRRIS
Benefits Transaction Team, your date of hire, or the date you become newly-eligible, whichever is later. For example, if your date of hire is March 1,
and your Flexible Spending Account enrollment form is received March 10, your account becomes effective April 1, and only eligible expenses incurred on or after your April 1 effective. If you enroll during the annual Open Enrollment in the fall, your account is effective January 1.
- Deadline for Reimbursement. Requests for reimbursements of expenses must be received by the claims administrator no later than May 31 of the following year. Your 2012 claims must be filed by May 31, 2013 and your 2013 claims must be filed by May 31, 2014.
- Your 2013 enrollment is effective until December 31, 2013. Once you enroll in an account, you cannot stop or change your deductions unless you have a qualified change in status. View Effective Dates and Mid-Year Election Changes for more information.
- Once you have specified a salary reduction, that amount is divided equally over the number of payrolls that remain following your effective date of participation in the plan. (See Bi-Weekly Payroll Deductions for FSAs if you are paid bi-weekly.) If you do not receive a paycheck, or have insufficient salary from which to take your FSA deduction, your FSA payroll contribution amount will increase in the following months in order to reach your annual contribution amount.
- Account funds are not transferable. You cannot use a Dependent Care Account to reimburse health care expenses, and you cannot use a Health Care Account to reimburse dependent care expenses. Also, you cannot transfer funds from your account into your spouse's account, and you cannot transfer your participation in an account to your spouse.
- Appropriate documentation is required. Itemized receipts are required for reimbursement. You should keep copies for your files of all documents submitted for reimbursement.
- Use it or lose it. Estimate your annual health care and dependent daycare expenses carefully before you establish your annual contribution amount. Do not contribute more than you reasonably expect to spend on eligible expenses for the year. The IRS requires that you forfeit any funds left in your account after the reimbursement deadlines have expired. Funds remaining in the account(s) on June 1 of the following year will be forfeited.
- Your contributions will lower your Social Security Wage Base. If you earn the Social Security maximum salary ($115,000 or more for 2012), your FSA contributions will lower your FICA Social Security taxes. Since your Social Security taxes will be calculated after your FSA contributions are subtracted, your Social Security benefits may be slightly lowered as well.
How To Enroll
To enroll in a Health Care and/or a Dependent Care Flexible Spending Account:
the annual contribution you want to make to a Health Care
account and/or a Dependent Care account. Keep in mind
that you cannot transfer money between the two accounts,
and you cannot transfer participation to your spouse.
Only expenses incurred on or after your effective date
of coverage are reimbursable. Use the Savings Calculator to help you determine how much to contribute.
- Complete the Flexible Spending Account Authorization Form. Return the completed form to the Benefits Office within the time limit indicated on the form.
The University of Michigan in its sole discretion may modify, amend, or terminate the benefits provided with respect to any individual receiving benefits, including active employees, retirees, and their dependents. Although the university has elected to provide these benefits this year, no individual has a vested right to any of the benefits provided. Nothing in these materials gives any individual the right to continued benefits beyond the time the university modifies, amends, or terminates the benefit. Anyone seeking or accepting any of the benefits provided will be deemed to have accepted the terms of the benefits programs and the university's right to modify, amend or terminate them.